Miliband faces new business attack

Labour leader Ed Miliband is facing a fresh onslaught from business as he prepared to set out plans effectively to outlaw “exploitative” zero hours contracts.

More than 100 senior executives from leading UK companies have signed an open letter warning any “change in course” after the General Election on May 7 would threaten jobs and put the recovery at risk.

The letter was released as it emerged Mr Miliband is to promise legislation in a Labour government’s first Queen’s Speech guaranteeing employees the right to a regular contract after 12 weeks of working regular hours in practice with an employer.

The commitment – to be included in the party’s election manifesto – significantly strengthens its previous policy entitling workers to a regular contract after 12 months.

In their letter sent to The Daily Telegraph, the executives – who come from some the country’s best known companies – praised the Government’s economic policies, which they said had supported investment and jobs.

In particular they highlighted Chancellor George Osborne’s policy of progressively lowering corporation tax to 20% – which they said had been a “key part” of the Government’s economic plan.

Just hours earlier shadow chancellor Ed Balls announced that a Labour government would reverse the final reduction – due to take effect later this month – in order to hand a cut in business rates to small firms.

“It has been a key part of their (the Government’s) economic plan,” the executives said in their letter.

“The result is that Britain grew faster than any other major economy last year and businesses like ours have created over 1.85 million new jobs.

“We believe a change in course will threaten jobs and deter investment. This would send a negative message about Britain and put the recovery at risk.”

Mr Miliband chose to seize on the issue of zero hours contracts after David Cameron admitted during his televised grilling last week by Jeremy Paxman that he could not live on one.

Mr Miliband, who will set out his proposals at a campaign event today in Yorkshire, will say that the proliferation of zero hours contracts has come to symbolise the failure of the Conservative-led coalition’s economic policies.

He is expected to say: “What’s really worrying is that David Cameron isn’t worried. Why should he? It’s his plan for the economy. Do you remember what he told Jeremy Paxman last week when he was asked why are more and more people trapped on zero hours contracts?

“He didn’t say it was because low paid, low skilled work is booming on his watch. No, he said it was because people really want to be on them.

“Then he admitted he couldn’t live on one himself. Well, I say, if it’s not good enough for him, it’s not good enough for you. And it’s not good enough for Britain either.

“These zero hours contracts have become a symbol of the Tories’ failing economy with stagnant wages and falling productivity leaving a recovery which isn’t reaching your front door and a deficit still at Downing Street’s door.

“We will give working people more control of their working lives, we’re going to put an end to exploitative zero hours contracts.”

Labour officials said that while there would be exemptions for employees such as so-called bank nurses who specifically request a zero hours contract so they can work at another hospital as well as their usual job – more than 90% of the 1.8 million existing zero hours contracts would be banned.

The proposals were strongly criticised by CBI director-general John Cridland who warned that it could prove counter productive creating more instability for workers.

“Of course action should be taken to tackle abuses, but demonising flexible contracts is playing with the jobs that many firms and many workers value and need,” he said.

“These proposals run the risk of a return to day-to-day hiring in parts of the economy, with lower stability for workers and fewer opportunities for people to break out of low pay.”

The Conservatives said that just one in 50 jobs were zero hours contracts and that the Government had already acted to tackle abuses.

“Labour presided over zero hours contracts with no safeguards for three terms and 13 years while they were in power. Tony Blair even promised to ban them entirely as far as back as 1995 and then did nothing,” a spokesman.

“The fact is that three quarters of the new jobs since this Government came to office are full time – these are families across the country getting into work with the security of a regular pay packet.

The plans were however warmly welcomed by the trade unions. TUC general secretary Frances O’Grady said: “Zero-hours workers are often too afraid to speak up for their rights for fear of losing work.

“We need a fairer system that guarantees zero-hours workers decent rights at work and stops them from being treated like second-class employees.”